Question

A participating ordinary life policy in the amount of $10,000 is sold to an individual, age 35. The following cost data are given:
Annual premium ............... $230
Total dividends for 20 years ........... $1613
Cash value at end of 20 years ......... $3620
Accumulated value of the annual premiums
at 5 percent for 20 years ........... $7985
Accumulated value of the dividends at
5 percent for 20 years ............ $2352
Amount to which $1 deposited annually at the
beginning of each year will accumulate
in 20 years at 5 percent ........... $34.719
a. Based on this information, compute the annual net cost per $1000 of life insurance at the end of 20 years using the traditional net cost method .
b. Compute the annual surrender cost index per $1000 of life insurance at the end of 20 years.
c. Compute the annual net payment cost index per $1000 of life insurance at the end of 20 years.



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  • CreatedJanuary 30, 2015
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